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sandip pathak (none)     08 January 2015

Service bond

I had signed a bond of 2 years with a software company. After 4 months of landing in the job, my mother got ill and I requested the company for leave. They did not grant it. After that, the company has been sending me notices to pay the bond amount(50000) plus one months excess salary that they had paid me. However, they are also demanding an exorbiitant 18% interest on the total amount. It has been 3 years since I left the job. Though interest was mentioned in the service agreement, it was not mentioned to be 18%. In the last letter, an arbitrator appointed by them asked me to be present in mumbai failing which they he would pronounce an ex-parte decision. As of now, I have no savings to pay such amount. But I am also worried about paying such huge interest if I have to pay the amount later on.

Please help me out!!!!!


 7 Replies

Kumar Doab (FIN)     09 January 2015



1. You may show the documents on record starting from job advt, job application, interview call letter, selection letter, offer letter, appointment letter, service agreement, BOND, all communications exchanged till date, notice of the sole arbitrator appointed by the company,  and any other communication record ......................to your Labor Law consultant/service matter lawyer and understand the merits and options and remedies before you proceed further and start writing to your company.................
The reply to the legal notice should preferably be issued thru your able lawyer.



2.      Get in touch with Employee’s Unions/Trade Unions leaders like CITU,INTUC,AITUC,BMS etc…………………and other IT/ITeS Employee’s Unions.

Trade Unions in West Bengal and Maharashtra have traditionally been very strong.


There are many IT/ITeS employee’s unions and they are doing a good job and trade unions like CITU,INTUC,AITUC,BMS etc are willing to embrace the employee’s from your sector….





IT/BPO Voice of India | Facebook

UNITES Professionals







Shiv Mahiti Ani Tantradyan Sena(Shiv IT SENA)







https://www.amrc.org.hk/node/1088         CBPOP






Shiv Sena forms first union in information technology sector



Another Political party PMK in Tamilnadu has joined the movement…


You may go thru::

A Chennai-based group called Young Tamil Nadu Movement(YTNM)

The IT Employees Centre (ITEC) and the Federation of IT Employees (FITE) 











I have attempted to post meaningful and relevant information in threads at LCI in similar queries.

YOu can search threads with similar queries at:




( the right hand bottom side you will find button with ' Search 

 Topics and Posts'...................GO......................just enter the key words and you shall have access to plethora of information.)

And many other threads at many other forums e.g.;



3. The service agreement is created in lieu of what: extra ordinary favor by the company e.g. some certified training from some certified Instt.? If yes did the company provide it or breached its own promise?
Did the company place the agreement before you before issuing the appointment letter or after it?
Did the company make some equitable promise of not terminating the employment before……..months and pay equitable 
amount as compensation if it does?

Did the company provide everything on time e.g. payment of earned wages, ask to do duty beyond work hours and pay OT, behave properly at work place...................etc...................?

All of these would be required to understand the reasons that your lawyer would need, hence the inputs and evidence is to be provided by you!

The company is counting on on line of acceptance by you to claim the liquidated damages stated in agreement :::::::that is you can not rescind the contract signed by you!

Did the company issue emails/letters/notices/show cause notice/legal notice till date and did you reply to it?

Is it stated in BOND that matter can be referred to Arbitrator and Sole Arbitrator shall be appointed by company?


The fitting reply by your lawyer could have put the matter on PERMANENT SHUT UP MODE..........
If the company decides to take the matter to court then court shall decide and it might be Pro rated damages.


Your lawyer may also opine that liquidated damages are not necessarily to be paid on demand and may have to be proved.

You have made the same mistake that majority of the employees make i.e. they remain ill informed, do not form unions,do not form GRC( Grievance Redressal Committees..............................that will have equal no. of employees....................and some states e.g Karnataka has notified it), Works Committee (that is an authority as per ID Act and President is from employee's side and has equal no. of employees and can negotiate service conditions and take up such matters), affiliate with trade Unions..........................and offer themselves for exploitation by unscrupulous employers........

You can also seek guidance from leaders of Trade Unions Leaders e.g. CITU,INTUC,AITUC,BMS etc.......................and their intervention can comple the company to withdraw the legal notice............



The bondage has been prohibited by the law of the land long time back!!!!!!

Hence the employer and his attorney's in Line Management/HR /legal cell resort to tactics so as to extract the amounts to employee without entering into litigation.

It shall be fair of the employer and his attorney's in Line Management/HR /legal cell to not to impose any service agreement/bond on employees if there are expenses incurred on employee on some meaningful training.......

Thee employees on their part should form Employee's unions/GRC/Work's Committe(that is an authority as per ID Act) 
and negotiate service conditions with employers and put a full stop to unethical and illegal practices....

The employee should clearly decline that employer did not incur any expense on any training from some certified Institute that added to the qualification of the employee or employer did not incur any expense on any extra ordinary favor to employee.....

The readers may find following threads and following judgment, legal points and legal interpretations relevant and useful...........................
Interestingly the employee and his lawyer by not declining to point out that there is no possibility of calculating the damages and hence court of law awarded the employer award of Rs. Rs.44,330/ against claim of Rs.3,95,170/ by the employer.........

Had the employee and his lawyer not erred the court might have not awarded this peanuts amount of RsRs.44,330/ also.................



Delhi High Court
M/S. Sicpa India Limited vs Shri Manas Pratim Deb on 17 November, 2011


1. The challenge by means of this Regular First Appeal under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the impugned judgment of the trial Court dated 9.7.2002. By the impugned judgment, the trial Court dismissed the suit of the appellant/plaintiff filed for recovery by entitling the appellant to adjust an amount of Rs.44,330/- payable to the respondent/defendant/employee and held that the appellant was not entitled to recovery of Rs.3,95,170/- as claimed in the plaint.
2. The facts of the case are that the appellant/plaintiff/employer appointed the respondent/defendant as a Sales Executive on 28.11.1994. The appellant/plaintiff company is engaged in manufacture of specialized inks. The appellant/plaintiff claims to have sent the respondent/defendant abroad for training twice and for which two employment bonds dated 24.4.1995 and 24.1.1998 were got executed. As per the employment bonds, the respondent/defendant was either bound to serve for a period of five years or pay a sum of Rs.2 lacs if he left the services earlier. The respondent/defendant tendered his resignation vide letter dated 21.2.2000 i.e. before the expiry of period of five years i.e. period of the second bond dated 24.1.1998. The appellant/plaintiff therefore enforced the two bonds and called upon the respondent/defendant to make the payment of Rs.2 lacs for each of the bond besides claiming an amount of Rs.17,290/- as notice period of 57 days and Rs.117/- towards excess medical expenses reimbursed.
3. The respondent/defendant contested the suit and pleaded that the clauses of the bonds in question were unfair, unjust and just opposed to the public policy and therefore the same were not enforceable. …………………………..
5. The trial Court has arrived at the following conclusions for dismissal of the suit:-
(i) Clauses in question which are part of the employment bonds are violative of Section 74 of the Contract Act, 1872 as they are in the nature of penalty and hence the same cannot be enforced.
(ii) So far as the first bond is concerned, the same was more or less complied with as the resignation is of February, 2000 and the bond would have expired by April, 2000. So far as the second bond is concerned, it was held that total expenses which were incurred for the second trip were of Rs.67,596/- and which would have been recouped by the period of two years of the service given after execution of the second bond. In any case, the trial Court held that the respondent/defendant was entitled to Rs.44,330/- as per the admitted case of the appellant/plaintiff and which amount therefore can be treated as adjusted for the claims against the second bond since the expenses of the second trip were only Rs.67,596/-.

10. In view of the aforesaid and considering the fact that first bond had more or less worked itself out, the second bond was towards a trip of which expenses were only of about Rs.67,000/- and the respondent/defendant had worked for two years besides the impugned judgment allowing an adjustment of Rs.44,330/-,………………..



4. Since time available to you is short get in touch with an able lawyer ASAP in person at your location and proceed under expert advice of your lawyer.


On line discussions have its won limitations and can’t replace the merits and remedies suggested by a lawyer that has examined the docs and inputs in person.

Kumar Doab (FIN)     09 January 2015



 1.Leave: Did you apply for leave in writing under proper acknowledgment?

Was leave refused in writing?

For such purpose refusal of leave may be deemed as bad.

The Software companies are covered by (Name of the state) Shops and Commercial Establishments Act……………..that was enacted to govern the service conditions of the establishments covered by the Act…………..and (service conditions)…….  leave policy of the company can offer superior benefits as stated in this Act but can not offer inferior benefits……..and standing orders (certified/Model) shall apply…


(i) AS per West Bengal Shops and Commercial Establishments Act Sec:11


As per Language ‘Every person shall be entitled to…..’

PL=14 days

CL=10 days


You may buy the latest version from market or obtain from Inspector appointed under this Act…


(ii) As per The Bombay Shops and Establishments Act, 1948;Sec:35:


As per Language ‘Every employee be allowed leave…..’


Moreover in Maharashtra as per The Bombay Shops and Establishments Act :Sec; ^[З8-В. Application of Industrial Employment (Standing Orders) Act to establishments>>>>>

Standing Orders shall apply if establishment employs 50 or more persons….

The employer has to display the Standing Orders at a conspicuous place /notice period and supply the certified copy to employee even if against a nominal cost say Rs.10/---


Employee or anyone can obtain certified copy from CO (certifying Officer that might be DLC in o/o Labor Commissioner at location of Redg. Office of the company)….against a nominal charge of say Rs3/page….. 


If standing Orders are not certified Model Standing Orders shall apply.

Model Standing Orders:


You may go thru: Sec9,10

The BOND may be in Contravention of Standing Orders…………………and even Shops and Commercial Establishments Act…


Standing Orders (certified/Model) is Instrument of Law/Statue and no private rule/policy/agreement drafted by employer and signed with employee e.g. HR policy/Service Rules and Regulations/appointment letter/offer letter/contract of employment/service agreement/Bond……………. can supersede and overrule Instrument of Law/Statue


2. Limitation: It is also felt that after 3 years the claim of the company might be hopelessly time barred.







sandip pathak (none)     09 January 2015

Thanks for replying.


  1. I have records of mails wherein I requested the company to grant me leave.
  2. Their reply had been thus : You
    cannot go on leave as you do not have any leave balance. and for any leave
    without pay you need to get prior approvals..
  3. The training was for 12 months. I did 4 months of training. Would the whole amount of 50,000 be applicable ?
  4. Yes, there was provision of arbitration in service agreement.
  5. Is it possible that the courts would at least relieve me of the interest payments.
  6. Would it be wise to ignore the notices of arbitrator? The arbitrator is appointed by them, maybe he would anyway act in their favour.

Kumar Doab (FIN)     09 January 2015

It shall not be wise to ignore any communication.

It shall be wise to submit fitting reply to all communications suitable drafted by a lawyer/law firm that examined all inputs and docs...........

It shall be unwise to not to consult a lawyer in person at your location at this stage.........

It shall be unwise to unneccessarily roam in various forums......as online discussions have its own limitations.... 


The Arbitrator appointed by the company may be inclined to side with company.................

Once the matter is in court the court shall decide what to award and to whom..........BASED ON THE MERITS PUT BEFORE THE COURT.

Meet your lawyer in person.....


You don't seem to involve trade Unions.


1 Like

Kumar Doab (FIN)     09 January 2015


Regret missed to note the one month excess salary……

You have posted that:

I had signed a bond of 2 years with a software company. After 4 months of landing in the job, my mother got ill and I requested the company for leave. They did not grant it. After that, the company has been sending me notices to pay the bond amount(50000) plus one months excess salary that they had paid me. However, they are also demanding an exorbiitant 18% interest on the total amount. It has been 3 years since I left the job. Though interest was mentioned in the service agreement, it was not mentioned to be 18%. ‘



What does this one month excess salary pertains to?

You have to prove the claim is faulty, and your lawyer may opine that the claim and action is illegal, unreasonable, unconscionable, unenforceable…….and that a Union Leader may accompany you……………..and a lawyer can accompany you…..


1. Notice Period/pay:


Bombay Shops and Commercial Establishments Act:

Sec;66: for 4 months of service; 14 days  and list of misconducts is explained and that if  termination is without notice (except in case of Misconduct) then reinstatement with back wages can be claimed.


West Bengal Shops and Commercial Establishments Act:

Sec15: for 4 months of service: NIL…


If standing order are applicable but not certified then you may note from Model Standing Orders that: Notice Period/pay during Probation Period is NIL………………

The notice period/pay can not be more than the Acts applicable to the company.


2. Leave: for event involving sickness of Parent; should ideally be not declined even if on LOP………………………..if agitated properly this may indicate the employer as ‘unworthy’ of being employed with……………..

The eligibility of all kind of leave has already been cited in the Acts…………..

How much leave you availed that you exhausted all leave as per communiqué of the company referred and posted by you.  


3. Training: What was it: On the job training so as to enable you to handle the counters of employer or some certified training from some certified Institute that would add to your qualification and what was the actual expense incurred by employer (with Bills)?

What was your designation: Trainee (as per Standing Orders of the management and in such case management is ought to have certified standing orders)

Or Apprentice: as per Apprenticeship Act:; in such case everything shall be governed by this Act and Apprenticeship Rules 1991, including refund claimed by company and its Arbitrator…

Were you given salary slips every month, and what does it show Salary or ……..?


Were you actually working as regular employee and fetching revenue for the employer?


Were you terminated; if yes what was the charge leveled in Termination Order?


You may get in touch with local lawyer…….

If you wish you can consult by searching and accessing LCI databank at:



You shall have to settle the terms and conditions, fees etc on your own.

It shall be prerogative of the lawyer to charge NO Fee Or Fee as per his Fee will and choice.


Mr. Devajyoti Barman is expert from Kolkota and he may agree to counsel you.



1 Like

sandip pathak (none)     09 January 2015

Thanks for your response. I shall contact Mr Devajyoti Barman.

1. The company paid me salary for a month when actually I was not present there. However, the company billed the client against me during the period. This I came to know while I had talked to my team lead. She had told me that the client was not informed about my absence. This is unethical, perhaps illegal. But, I do not have the proof of conversation.

2.The company did not inform me about termination.

3.Yes, I had used up all my leave dues.

4.My designation was ASE Trainee. 12 months training(3 months for my skill improvement next 9 months the company would bill clients against me). However, I left after 4 months.

5.My question is after arbitration whether they would go to local court for the order to be implemented?

And would the court hear my appeal or I would have to file a separate case requesting to postpone implementation of the arbitrator's order?

Thanks again for your help.

Kumar Doab (FIN)     09 January 2015


The lawyer you contact in person with all docs and the lawyer that has analyzed the merits can answer all of your questions.

Generically speaking: If the award of the arbitrator is arbitrary,biased it can be contested................


As ASE-Trainee probably you were to be acquainted with the various processes, software, technology ,products, policies, strategies that the company employ.......................so as to enable to handle the work of the company........Such training and for that matter on the job training should be without any cost to the employee...................


Probably the systems and technologies or even if you call them skills were no extra ordinary  skills , were existing, not patented, were obsolete……………………..or even provided by the client…………….hence company should not charge even a penny from you. You on your own and thru your lawyer should prove it hence help the arbitrator and court to decline any award or liquidated damages………….

E.g. A bank operates on Pinnacle software decides to shift to some other ………………….it does not mean that the employees of the bank shall sign a BOND.

If client was to be billed on your presence but was billed without your presence amounts to breach and may amount to even fraud………………..and employer as unworthy to be employed with…………..

How much was to be kept by your employer (or to be paid to you) from payments made  by the client to your employer?

The company your employer has to account for all inward/outward payments and file its returns accordingly and has to maintain the record for ……………years (usually 4-5 years)…………….

A smart lawyer can call for the records and put the company in traps…


The company is ought to issue and supply the termination order if it has terminated you………………….and has to terminate as per standing orders applicable to it……………..

You should proceed under able guidance of your lawyer.

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